Accrual-basis Cash-basis Transaction Revenue Expense Revenue Expense 1. Receive cash from customers in advance, $60O. 2. Pay utilities bill for the previous month, $150. 3. Pay for insurance one year in advance, $2,000. 4. Pay workers' salaries for the current month, $800. 5. Incur costs for employee salaries in the current month but do not pay, $1,000. 6. Receive cash from customers at the time of service, $1,700. 7. Purchase office supplies on account, $330. 8. Borrow cash from the bank, $4,000. 9. Receive cash from customers for services performed last month, $750. 10. Pay for advertising to appear in the current month, $450.
Accrual-basis Cash-basis Transaction Revenue Expense Revenue Expense 1. Receive cash from customers in advance, $60O. 2. Pay utilities bill for the previous month, $150. 3. Pay for insurance one year in advance, $2,000. 4. Pay workers' salaries for the current month, $800. 5. Incur costs for employee salaries in the current month but do not pay, $1,000. 6. Receive cash from customers at the time of service, $1,700. 7. Purchase office supplies on account, $330. 8. Borrow cash from the bank, $4,000. 9. Receive cash from customers for services performed last month, $750. 10. Pay for advertising to appear in the current month, $450.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter8: Current And Contingent Liabilities
Section: Chapter Questions
Problem 46BE
Related questions
Question
Consider the following transactions
Required:
For each transaction, determine the amount of revenue or expense, if any, that is recorded
under accrual-basis accounting and under cash-basis accounting in the current period.
![Accrual-basis
Cash-basis
Transaction
Revenue Expense Revenue Expense
1. Receive cash from customers in
advance, $60O.
2. Pay utilities bill for the previous
month, $150.
3. Pay for insurance one year in
advance, $2,000.
4. Pay workers' salaries for the current
month, $800.
5. Incur costs for employee salaries in the
current month but do not pay, $1,000.
6. Receive cash from customers at the
time of service, $1,700.
7. Purchase office supplies on account,
$330.
8. Borrow cash from the bank, $4,000.
9. Receive cash from customers for
services performed last month, $750.
10. Pay for advertising to appear in the
current month, $450.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F24607296-bc4b-4232-8d04-3050836d6749%2F3931b102-c2a5-4de9-a599-05f043cb2d6a%2Fpelzroa.png&w=3840&q=75)
Transcribed Image Text:Accrual-basis
Cash-basis
Transaction
Revenue Expense Revenue Expense
1. Receive cash from customers in
advance, $60O.
2. Pay utilities bill for the previous
month, $150.
3. Pay for insurance one year in
advance, $2,000.
4. Pay workers' salaries for the current
month, $800.
5. Incur costs for employee salaries in the
current month but do not pay, $1,000.
6. Receive cash from customers at the
time of service, $1,700.
7. Purchase office supplies on account,
$330.
8. Borrow cash from the bank, $4,000.
9. Receive cash from customers for
services performed last month, $750.
10. Pay for advertising to appear in the
current month, $450.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781305088436/9781305088436_smallCoverImage.gif)
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
![PAYROLL ACCT., 2019 ED.(LL)-TEXT](https://www.bartleby.com/isbn_cover_images/9781337619783/9781337619783_smallCoverImage.gif)